Woolworths boosts supermarket 1Q sales in NZ, Dick Smith revenue slips

Thursday 27th October 2011

Australian retailer Woolworths boosted sales at its New Zealand supermarkets in the first quarter as it opened one new store and reopened another damaged in the Christchurch earthquake.

The retailer’s New Zealand supermarkets boosted sales 3 percent to NZ$1.42 billion in the 14 weeks ended Oct. 2, it said in a statement to the ASX. That outpaced 1.9 percent food inflation, though lagged behind the supermarket division’s 5.8 percent growth overall.

The supermarkets are going through a rebranding process of switching every store to a Countdown in a challenge to rival Foodstuff’s low-cost Pak’nSave chain. Woolworths opened one new store in the period, and reopened another that had been closed due to Canterbury quakes, taking the total number of stores to 158 in New Zealand.

The New Zealand supermarkets accounted for about 8.9 percent of the group’s A$12.56 billion of sales from the supermarket division, and 7.7 percent of the entire group’s A$14.6 billion in revenue.

“We grew market share, customer numbers and items sold in the quarter in a challenging economic environment,” said PEL Supermarkets managing director Dave Chambers.

Still, Woolworth’s Dick Smith stores in New Zealand reported a 4.8 percent fall in sales to NZ$80 million, even as the trans-Tasman consumer electronics unit boosted overall sales 0.8 percent in the quarter.

Consumers have enjoyed cheaper equipment as retailers discount prices to attract demand. The price of telecommunications gear fell 9.2 percent in the September quarter for an annual decline of about 25 percent, while audio-visual and computing equipment fell 4.8 percent in the quarter for an annual drop of almost 12 percent, according to government data.

The stock had yet to trade on the ASX today, which has been coping with a technical glitch, and last changed hands at A$24.15 apiece. The shares have shed almost 11 percent this year.

(BusinessDesk)

BusinessDesk.co.nz

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